As the days pass by, the number of African consumers coming online keeps increasing. Compared to other demographics, commercial habits of the African consumer keeps evolving quite faster. McKingsey Global Institute forecasts that by 2025, consumer spending in Africa would exceed $2.1 trillion, annually. That amount is the clearest evidence yet that Africa as a market is on the cusp of a digital retail boom.
With improved financial technologies and internet penetration being some of the factors paving the way for growth in the online retail sector, e-commerce is on the rise as mobile money has become the preferred payment platform that most consumers engage with.
For the African retailers to gain from the shift towards technology, they must first cater to the tech-savvy youth market. This demographic grew up with technology, and as they expect more technology, they’re often the early adopters. So for a retailer to catch the eye of the younger crowd who are regular spenders, it’s important to be aware of new and innovative technologies and how to integrate that into their system(s).
Convenience is the key factor that African retailers need to consider. While there’s a sizable under-banked market that exists, we should not forget that for most people, traditional banking can be cumbersome. The arduous manual process can get a consumer to give up on a deal because… inconvenience. While cash is king for some, to a lot of people, making a cashless payment in seconds because of technology, is way more attractive. You can’t deny the flexibility and security that comes with that.
In 2017, the global digital payments market was valued at $32.5 billion. The market is projected to reach $86.76 billion by 2023. Judging by such figures, there is no argument about the potentials that digital payment methods come with.
And it’s of benefit to all parties concerned. Utilising technology empowers both the merchant and the customer in embracing a more cost-effective, secure, and mobile environment that makes their transaction process a lot more smoother.
Definitely, e-commerce would be key to economic growth in Africa, and digital payments will play an important role in that. But first things first; there has to be trust between merchants and customers in relation to the quality of service being promised.